Home Equity Line of Credit (HELOC)

How It Works

A revolving credit facility secured against your home.

A HELOC works like a credit card secured by your home equity. Once approved, you draw from it as needed and pay interest only on what you use. You can repay and redraw repeatedly without reapplying.

The maximum HELOC amount in Canada is 65% of your property's value. Your mortgage and HELOC combined cannot exceed 80% LTV. So if your home is worth $800,000 and you owe $400,000 on your mortgage, you may access up to $240,000 through a HELOC.

Payments are interest-only, which keeps monthly costs low while you use the funds. The rate is variable, typically Prime + a small margin.

Maximum Access

65% LTV

HELOC limit is capped at 65% of appraised value. Combined mortgage + HELOC cannot exceed 80% LTV.

Payments

Interest Only

You only pay interest on the amount drawn. No minimum principal repayment required.

Rate

Variable

HELOC rates move with Prime. Typically Prime + 0.5% or similar, depending on the lender and your profile.

Common Uses

When a HELOC makes sense.

Renovations

Draw funds as you need them, pay interest only during the project, and repay on your schedule. Ideal for staged renovations where costs come in phases.

Investment

Using a HELOC to invest, in a rental property, RRSP, or non-registered account, can make the interest tax-deductible. This is a common and effective strategy for high-income earners.

Emergency Fund

Having a HELOC in place with nothing drawn costs nothing. It sits available for unexpected expenses, a roof, a furnace, a job transition, at a rate well below a personal line of credit.

Qualification

How to qualify for a HELOC.

To qualify, you need sufficient equity in your home (at least 20% after the HELOC is applied), solid credit (typically 650+), and income that passes the stress test on the combined mortgage-plus-HELOC amount.

HELOCs are registered as collateral charges, which means switching lenders at renewal requires discharging and re-registering, something to factor into your long-term plan.

Not all lenders offer HELOCs, and terms vary significantly. Kyle will identify which lenders make the most sense for your equity level, intended use, and plans at renewal.